First I’d like to commend you for sticking with me through the previous six installments.  We’ve covered a lot of ground, and hopefully you’ve been able to take something of value away from each article.  Now we finally come to the end.  We’ve discussed lots of topics, from technology to advertising.  From theory to practical application.  Now it’s time to help you assemble your own online marketing plan and what specific steps you need to take to put your newly formed strategy into action.  So let’s get started.

Before jumping into your plan, we need to consider your budget.  In my practice, my online and offliine marketing budgets were initially split evenly.  As I began to see that I got a higher return on investment for my online marketing, I began to slowly phase out my offline strategies and spend almost all my marketing budget online.  With the number of real estate customers beginning their online increasing year after year, I think you should start by apportioning at least half of your budget to online advertising.  So how much should your advertising budget be?  The experts tell us that you should commit 20% of GCI (gross commission income) to marketiing.  I believe that if you use low-cost online marketing, you can generate more business than you can handle for 10% of GCI.

So let me suggest this: If the experts say 20% of GCI, let’s take half that amount (10%) and spend it on your online marketing.  Then when you see the amazing results possible, you can begin to phase out your offline budget until eventually you are left with only your 10% being spent online.  One other thing I’d like to mention about your budgeting is this:  You have to budget your advertising based on what you want your income level to be, not what it currently is.  For example, if you’d like to gross $100,000 next year, you should budget for $20,000 in marketing expenses.  That’s $1,667 per month that you need to invest, and you have to invest it before you get it back.  Much like farmers have to buy seed before they reap their crop, you must invest in the seeds of your sales, and that’s your marketing.

Next let’s talk about how much you can afford to spend per lead in advertising.  Using the proper lead capture technology you should be able to stay well under that amount, but you need to know what your leads cost you and whether you are within you budget.  Here’s how you can determine your budget per lead.  Find the average sale price in your market.  Multiply that by your average transaction side percentage, and then multiply the result by your company split.

For example, if the average sale price is $200,000 and your average transaction side is 3%, your average gross commission is $6,000.  If you are on an 80% commission split with your company, your average net commission is $4,800.  Twenty percent of that is $960 per closed deal in advertising.  Now take that number and divide it by 24 (the average number of leads required to produce a closed transaction), and you have a maximum cost of $40 per lead.  If your eyes are glazing over, get out a calculator and go back and re-read the first part of the article.  It’s really pretty simple.

Now, you need to look at your website.  If your current website produces leads within your per-lead budget you don’t have to do anything.  If you’re like most agents, however, your cost per lead produced is much higher than your budget.  Nationally, the average cost per online lead is $116.  That means that unless your average commission (after broker split) is $13,920 the cost per lead is too high.  ($116 times 24 leads per deal is $2,784 divided by 20% is $13,920)  Let’s assume you need to improve your website capture before spending money.  What should you do next?  I believe you need to decide whether you want to buy better technology or whether it might be better to build your own.

First let’s discuss building it yourself.  If you go back and study this series of articles, you should have the basic information you need to start building your own lead capture technology.  Do you have the technical skills to do it yourself?  That’s what I did back in 2002.  I looked around on the Internet for a ready-to-go solution and couldn’t find one.  All I found were template websites for agents, all focused on giving out information rather than capturing customers.  So, I got a couple of books and learned to build my own using Microsoft Publisher (not recommended).  To be honest, the last thing I wanted to do was spend hours every night after work learning to build my own website, but I didn’t have any choice.  Frankly, if I’d have been able to get the technology for less than the price of a magazine ad a month, I would have done it in a second. Another solution might be to find a low-cost geek to build it for you.  A good place to start looking might be asking at your local high school computer department, or advertising on Craig’s List or Guru.com to find a low-cost geek for hire.

Again, if it were me, and the technology was available reasonably, I’d buy it.  My problem was that it wasn’t available when I needed it so I built my own.  And it worked so well that I eventually started licensing my solution to other agents, and our technology division was born.  Many generations later, our solution is only $120 per month, turn key.  I’d appreciate it if you’d at least take a look at it.  It comes with an integrated contact manager (better than Top Producer or Agent Office) and a free website.  But many agents use their own existing website, and that works fine too.  The point is that if it reduces your cost per lead from $116 to $4, it’s nearly paid for itself on the first lead.  But whether you build it yourself or buy it, it is absolutely imperative that you acquire good lead capture technology before spending advertising money on an inefficient website.  Without an efficient gateway, your cost per lead is just going to be very high, and you’ll run out of money before you attract enough customers.

I’d like to mention one other thing about your lead capture solution.  You should search for a technology that is integrated with a contact manager or CRM.  The reason for this is that many of your customer leads will come to you during phase one of the buying cycle.  Because of that, you will need to manage your communication with them for as much as 90 days before actually showing them houses or listing their property.  Integrated contact management will cut your work load down to a fraction.  Imagine keeping up with hundreds of conversations and emails with dozens of leads.  With our LCM gateway technology, when a lead is captured, it is not only emailed or texted to the agent, but it is simultaneously dropped into their contact manager to assist in hassle-free followup.  With a single click, our agents can see the entire history of any customer.  With another they can access dozens of template emails, make their own templates, or send a non-template email and have it placed in the permanent history file.  Believe me, when you are working lots of leads, having the integration is a huge advantage.

Well, that brings me to the end.  I truly hope that you’ve been able to receive something of value in reading these articles.  Please send me an email and tell me what you think of this series.  And if you’re still somewhat confused, and would like a free thirty-minute one-on-one online marketing evaluation by one of our team, click here.   We would be happy to help you understand your online marketing and lead generation in detail.  Don’t worry, no salesman will try to pressure you or sell you anything.  Go ahead and let us check out your online marketing — it’s free with no strings attached.  I am confident we will find a few places to save you money and increase your results.